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Re:CAP Recommends | Mr. Jones' Act

What: In the wake of Hurricane Maria, the Jones Act made national news as a major obstacle to getting aid to Puerto Rico. This episode of Planet Money discusses the Jones Act, a law passed almost ninety years ago in the wake of World War I. With the intention of protecting American shipbuilding and promoting military readiness, the Jones Act requires all shipping from one American port to another to be carried on an American made, American owned, and American staffed ship flying the American flag. In normal times, the law is little known to the general public, but it widely affects the American economy, and creates unexpected and unintended obstacles to a variety of industries.

Takeaway: The podcast argues that the Jones Act has created more harm than good for the US economy. It can serve as an example of the long term consequences of interventions which can be hard to anticipate or control, leading people into convoluted ways of avoiding the regulation. One particularly potent example of this is a Hawaiian cow farmer who, in order to satisfy demand for burgers in the continental U.S., often puts calves on planes to avoid the heavy costs of shipping under the Jones Act.